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Talent Management Applicant Tracking System Recruiting & Hiring

4 Benefits of Competency-Based Recruitment and Hiring

May 11, 2023
9 min read

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Hiring teams base their decisions on many factors, most significantly a candidate’s experience, qualifications, and core competencies. Core competencies are the unique traits, attitudes, and behavior patterns that enable employees to succeed in that particular role. Experience and expertise are easy to assess. But competencies are not always easy for talent acquisition professionals to identify and are often overlooked in traditional hiring processes.

Empower your recruiters and hiring managers to make smarter hiring decisions with a competency-based system. A competency-based recruiting system standardizes core competencies for every role to help recruiters and hiring teams better understand the qualities of a best-fit candidate. 

Employee #CoreCompetencies can help you eliminate bias, find better candidates, and retain your top talent:

Examples of employee core competencies for an executive assistant include attention to detail, problem-solving, and organization. A human resources generalist position requires candidates who are excellent communicators and self-motivated with great time management skills. 

This system prioritizes candidates whose competencies best fit the role and reduces or eliminates requirements for formal education and years of experience. Its benefits range from eliminating bias to decreased employee turnover rates. It also helps your team make better choices about who they hire.

Let’s take a closer look at five of the benefits of competency-based hiring during the recruitment process and beyond.

1. Competency-Based Systems Eliminate Bias

Workplace diversity statistics show that 76% of employees and job seekers said diversity is important when evaluating job offers. But if your hiring process is biased, you’re missing out on outstanding candidates and failing to build the diverse workforce candidates expect. Excluding candidates based on experience and education results in a much less diverse candidate pool and, consequently, a less diverse workforce. 

Did You Know?

Hiring for skills is five times more predictive of job performance than hiring for education and more than two times more predictive than hiring for work experience. - via McKinsey

Competency-based interviewing and scoring allow recruiters and hiring managers to focus solely on the strengths and behaviors they know will make the candidate successful. In addition, it increases fairness by ensuring hiring teams evaluate candidates based on the same competency standards via a structured interview process.

Minneapolis College found that when they stopped requiring bachelor’s degrees and a minimum number of years of experience in recruiting, their candidate pool became more diverse. They increased workforce diversity by 6%, with new hire retention rates of around 90%. 

Remove bias in your #hiringprocess with competency-based #recruitment. Learn more about hiring for #CoreCompetencies:

2. Competency-Based Systems Increase Candidate Quality  

Competency-based systems for recruitment help hiring teams set benchmarks for candidates, which increases the quality of the candidates they interview. A candidate with the right mix of core competencies who lacks the educational background you’re looking for is often a better fit than one with fewer competencies and the right education. That was the result for Minneapolis College, where eliminating some requirements brought in candidates with more relevant skills than top candidates found via their traditional hiring methods. 

First, to set the standards, evaluate employees who have been particularly successful in each role, using resume data, performance reviews, peer evaluations, and other information. Then identify core competencies that those employees share. Finally, create a list of proven employee competencies required for each role to include in future candidate evaluations. 

Recruiters can use benchmarks to write accurate job descriptions and speed up the selection process. In addition, core competencies help recruiters screen candidates more efficiently, weeding out candidates unlikely to be a good fit and surfacing those who may have been overlooked. 

3. Competency-Based Systems Improve Employee Retention 

Reduce the chances that you’ll lose your best people with competency-based hiring. Companies that hire based on skills are 98% more likely to retain their high performers. They’re also 107% more likely to put candidates in the right roles. In short, choosing candidates based on what they’re best at makes it more likely that you’ll hire the absolute best person for every role.

Competency-based recruiting and hiring have a ripple effect, leading to other positive outcomes that strengthen employee retention:

  • More effective training and development programs that target skills gaps
  • Better decisions about internal hiring and promotions
  • Offer competitive compensation based on skills
  • Evaluate performance accurately and give specific, helpful feedback
  • Set clear expectations and goals centered around strengths

4. Competency-Based Systems Improve Organizational Performance

Your entire company thrives when you make hiring choices that take competencies into consideration. Hiring for skills over formal education or experience is proven to have excellent results. It helps improve productivity, build company culture, and increase agility and innovation.

Companies that focus on hiring and assigning duties based on their people’s skills and strengths are:

  • Up to 41% more productive 
  • 79% more likely to provide a positive employee experience
  • 49% more likely to provide an inclusive environment
  • 52% more likely to innovate
  • 57% more likely to effectively anticipate and adapt to change

Competency-based recruitment is key to improving employee retention, removing bias from the hiring process, and hiring high-quality candidates who contribute to organizational success. 

Build a smarter hiring process with core competencies and a competency-based recruitment system. Find out how ClearCompany Talent Management can help you identify, implement, and execute competency-based recruiting by signing up for a demo today

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